Deal Done? Yahoo to acquire Tumblr in a $1.1 billion deal

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Yahoo’s board has approved a US$1.1 billion deal to acquire Tumblr, according to “people familiar with the matter” talking to the Wall Street Journal.

It is unknown if Tumblr would accept the deal or not; but the deal’s announcement could be held on Tuesday (our time). Forbes is reporting that the Tumblr board has already voted in favour.

Marissa Mayer has assured that Tumblr will continue being on its own and will have a hands off approach – except in infrastructure (especially on that, given that they have had outages in the past) and advertising.

“At the beginning, at least, it’ll be hands off,” said one person talking to AllThingsD. “It has to be.”

Users on the site, however, aren’t really pleased to see Tumblr being bought out by Yahoo – in a very exaggerated manner. “The End is Coming” is pretty much a recurring theme with people’s displeasure of the deal.

The deal will be Marissa Mayer’s first big acquisition – she has made several in the past, but only to expand the engineering and product-management teams at Yahoo. So, why is Yahoo making this purchase? It’s really simple: Advertising. Especially in mobile advertising – because Yahoo doesn’t need to code an entirely new app for its products, it can piggy back off the ads on Tumblr.

However, two problems stand in the way: Tumblr users aren’t used to seeing banner ads; and the porn. On the first problem: Tumblr does have advertising, but their ads are small little ads like Facebook on the sidebar or promoted posts on Tumblr from companies (only on mobile devices). So Yahoo has to be pretty smart about how it sells the advertising, because it is not the same.

And on the porn front? AllThingsD’s Peter Kafka writes:

To spell that out: Tumblr’s advertisers don’t have to worry about their stuff showing up on blogs like We Want Porn. At worst, it’s possible that they’ll end up advertising to a user whose dashboard includes posts from We Want Porn. But in general, they ought to be pretty well insulated from that stuff.

By the same token, if Yahoo wanted to, it could end up scrubbing Tumblr of porn, and losing a lot of users and views — but it probably wouldn’t lose much in the way of monetizable users. Unless it turns out that the majority of Tumblr’s core users have signed on exclusively to use porn.

In short: Tumblr advertisers will not be advertising on porn sites; and while porn could be scrubbed off Tumblr, it won’t if a large majority of Tumblr’s users sign on to view porn.

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